KLA-Tencor Corporation (KLAC)
Interest coverage
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 3,699,340 | 4,727,220 | 4,172,889 | 3,737,141 | 3,501,286 | 3,322,403 | 3,415,871 | 3,867,649 | 4,086,124 | 4,230,853 | 4,241,659 | 3,988,887 | 3,649,127 | 3,403,935 | 3,196,888 | 2,798,413 | 2,516,945 | 2,213,701 | 1,688,756 | 1,585,584 |
| Interest expense (ttm) | US$ in thousands | 302,166 | 311,877 | 319,969 | 319,190 | 311,253 | 301,908 | 296,701 | 296,779 | 296,940 | 267,646 | 232,850 | 196,422 | 160,339 | 156,112 | 155,226 | 156,254 | 157,328 | 157,300 | 157,439 | 159,031 |
| Interest coverage | 12.24 | 15.16 | 13.04 | 11.71 | 11.25 | 11.00 | 11.51 | 13.03 | 13.76 | 15.81 | 18.22 | 20.31 | 22.76 | 21.80 | 20.60 | 17.91 | 16.00 | 14.07 | 10.73 | 9.97 |
June 30, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $3,699,340K ÷ $302,166K
= 12.24
The analysis of KLA-Tencor Corporation's interest coverage ratios over the specified periods reveals notable fluctuations and trends in its ability to meet debt obligations through operating earnings. The interest coverage ratio, calculated as EBIT divided by interest expense, increased from 9.97 as of September 30, 2020, to a peak of 22.76 on June 30, 2022. This upward trend indicates an improvement in the company's capacity to generate sufficient earnings to cover interest costs, reflecting operational strength or enhanced profitability during this period.
Subsequent to the peak in mid-2022, the ratio experienced a decline, with values decreasing to 13.03 by September 30, 2023. This decline suggests a reduced margin of safety in covering interest expenses, potentially attributable to increased debt levels, decreased earnings, or rising interest expenses. Despite the decline, the ratio remained above 11 in most recent periods, indicating that the company continued to generate operating income well above its interest obligations, ensuring a comfortable cushion for debt service.
The projections for future periods, extending into 2024 and 2025, depict a slight recovery or stabilization in interest coverage ratios, with estimates ranging from approximately 11.00 to over 15.00. Such forecasts suggest a cautious optimism regarding the company's ongoing ability to comfortably meet its interest commitments, provided operational performance remains stable.
Overall, the historical trend demonstrates a substantial strengthening of interest coverage from late 2020 through mid-2022, followed by a moderate weakening thereafter. Nonetheless, the ratios remain within a healthy range, indicating that KLA-Tencor generally maintains adequate coverage of interest expenses relative to its earnings capacity over the analyzed periods.
Peer comparison
Jun 30, 2025